Analysts Indifferent to Alcatel (ALA, ERICY, LU)

Includes: ALA, ERIC, LU
by: SA Editors

Alcatel published earnings for a stellar quarter on Thursday; highlights include:

* Sales grew 7.6% yoy to $4.09 billion Euro ($4.93 billion)
* Net profit of 344 million euros ($417 million) in the quarter compared with 7 million euros a year earlier; annual net profit was up 61% to 930 million euros ($1.13 billion) in 2005.
* Free cash of 900 million euros ($1.09 billion) in the fourth quarter, bringing the cash position to 1.5 billion euros ($1.82 billion) at the end of last year.
*Dividend payout of 0.16 euro (19 cents) per share to be approved in June, the first dividend since 2001
*Projected revenue growth of more than 10 percent in the first quarter, eventually slowing in the second half of the year. "Slight" improvement in the 2006 operating margin, from last year's 9.1 percent.

The market responded favourably, with Alcatel shares up 4.5%. Analysts don't give much attention to Alcatel either way, though. Newratings, which tracks analyst upgradings and downgradings, lists the last change to an Alcatel rating as an upgrade by JP Morgan in March 2005. Compare this to Lucent with a dozen changes in the last couple of months or Ericsson with three downgrades in the last three weeks.

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